U.S. Internal Revenue Service goes to court to identify Kraken customers
What happened? The U.S. Internal Revenue Service (IRS) has petitioned the court for permission to examine the books and records of cryptocurrency exchange Kraken and its subsidiaries. The petition was released Feb. 9 just minutes after Kraken announced that it had reached a settlement with the U.S. Securities and Exchange Commission (SEC) over charges of offering unregistered securities.
How will the IRS use the documents? The IRS intends to identify the identity of the exchange's U.S. customers and verify their income tax compliance between 2016 and 2020.
IRS officials sent a request for information to Kraken back in 2021, but the exchange failed to provide the documents. Now the IRS is asking the court to enforce the request. Kraken told reporters that it has not yet received the subpoena, but is aware of the subpoena.
Previously, Kraken has stopped providing stacking services to U.S. customers in accordance with the SEC requirement. In addition to stacking, the cryptolending product, which offers returns of up to 24%, will be shut down.
In January, the IRS required citizens to pay taxes on profits from stacking, airdrops, hardforks and mining. Such transactions must be reported on a tax return.
